one you get away from. that has saved me a lot of money in the past week because the yen has gotten relatively strong instead of dramatically weak. it's a good thing to be out. >> dennis gartman, thank you. >> thanks for having me. always fun to be here. make sure to join us tomorrow. "squawk on the street" begins right now. good wednesday morning. welcome to "squawk on the street." david faber is in washington, where he will interview liberty media's greg maffei in a few moments. the dow coming off of that three-week low, retail leading the charge once again. tiffany, target, lowe's, another gm recall. the ten-year yield around 2.54. yellen speaks this morning but is unlikely to take questions. she gives the commencement address at nyu. europe in pretty good shape.

blockbuster retail sales in the uk, strongest in a decade. we begin with retail, moving the markets. luxury outperforming again as tiffany and burberry top estimates. target slashes its forecast. the good news, sales were not the disaster that some were expecting. bulls hate it, bears hate it, a pull-back in the market. it's a great market if you have a bit longer than half an hour to invest. plus break out the shopping list. google revealing it plans to spend billions overseas and the reason for optimism. jim's exclusive with sales force ceo. why it is the canary in the coal mine. first up, tiffany did report better than expected numbers as profits jumped 50% on strong global sales. the company's raising its guidance for the year. then there's lowe's backing its outlook despite weaker than expected q-1 earnings as severe weather did hurt the stores. we will talk about target, too. let's get to tiffany. 97 cents crushes 78 cents. >> i love this quarter.

this is about really all the globe with the exception of europe which is a little weaker. north america was terrific. you're talking about 9% comps, 11 in constant currency. a little inflated by japan where they put through what i regard as an idiotic japanese consumption tax that really killed their economy. they are doing a 20% -- >> people trying to buy in front of it. >> that was the big march buy. that was the japanese policy mistake. the main thing, strengthen -- remember the chinese communist party doesn't like conspicuous consumption in terms of housing. so what people are doing in china is buying expensive jewelry, expensive watches. you can still do that. tiffany, expensive jewelry that is allowed by the communist party. >> between them and nordstrom and estee lauder, one of the memes today is that luxury continues to work even as the discounters, and we will get to target, have some real problems. >> we have all talked about that

bifurcation. you made no secret of that. the question of course continues to be sort of in the middle of the lower end, obviously walmart's quarter we know was not a good one awhile back. we were dealing with home depot yesterday which i guess was okay in retrospect. >> yeah. by the way, there was a subtext to the home depot at the end where frank said mortgage rates surprise. maybe they should never have been where they were. instead of looking at mortgage rates and interest rates as being wow, what's the matter with them, they're going down, he basically called into question that they should ever spike last summer, we are going back. the question and window millwork he cited as being the strongest part. why is that important? because kitchens were what people were redoing in 2006. this was a very encouraging call. by the way, lowe's, before we write it off, the gap between home depot and lowe's did expand but lowe's had positive commentary about the month of

may. don't lump them in with pet smart, t.j. or staples. >> they are still guiding to 4% comps for the year. >> yes. >> even though this quarter came in at .9. we were looking for something much higher than that. >> look, they fell behind home depot. home depot is talking about three different tailwinds. the 18 to 35 staying with the parents, not so good. they are talking about mortgage rates coming down and about house price appreciation. house price appreciation still doing well. where house prices have appreciated too far, for instance, the phoenix market, and come down, they are still doing well. we got a big gardening weekend. i was talking to frank offline, he knows i'm a big gardiner, this is the weekend. >> let's get to target. they did miss the street with q-1, 70 cents misses 71 cents. traffic down for a sixth straight quarter as the retailer grapples with fallout from the massive data breach. courtney reagan will have an interview with john mulligan

later today on "street signs." additional $26 million charge related to that breach. u.s. comps down .3, margins down. is this hole too big to dig out of? >> no. because when you see something that's really fractional like that, i was thinking -- the whisper was it would be down 2%, 3%. they're down less than 1%. that's rather amazing. obviously canada a big mess. they parachuted those workers to canada. when you go into canada you got to take a nordstrom approach, be slow and steady. they did the complete wrong thing. but all that said, why wasn't it worse? the answer is because maybe you've got a situation that could be stabilized, you get a new leader in. it could be terrific. i like the fact some of the hard goods were okay. most importantly, this is the highest yielding of the mass merchant plays here. we love yield, right? so you get a yield that's around 3%, you will get buyers given the fact the balance sheet remains strong. in other words, they didn't screw it up. >> david, third straight quarter they bought back no stock and

they talk about, previously they talked about a desire to keep investment grade credit ratings. now it's being called a commitment to keep that. >> well, if you want to keep that, you're not obviously going to be spending a lot of capital on buying back stock or want to lever your balance sheet up in any way. interesting to note whether or not buy-backs are no longer perhaps working as well as they had to at least engender enthusiasm amongst investors. perhaps they are also responding to that. but listen, if you want to stay investment grade, best way to do it is allocate your capital properly, i guess. >> wait a second. home depot was supposed to buy back $4.5 billion worth of shares last year. they bought back 8.5 billion. take a look at home depot. it's not been a standout. i totally agree with you in terms of what it may mean. in terms of home depot gets it right, you are going to see a remarkable leverage and you are not going to see it at target. i actually believe -- sales force.com down badly today.

looking right now, could turn. they have added 100 million shares. shrink to grow is working. >> we will see. i don't know. i don't know, jim. >> meantime, those disappointing retail earnings did contribute to some of the selloff on wall street yesterday. dow down 137, closes at a three-week low as the major averages posted their first decline in three days. as for the small caps, that russell drops nearly 1.5. it is down 9.5 from its march high and people really looking for the russell and midcaps to lead us one way or the other here. >> yeah. you got to watch netflix moving into germany and france. that stock started anticipating this kind of expansion yesterday. it's been one of the worst performers. then watch the sales force as you mentioned at the top. sales force put up an operating cash flow number that was extraordinary, $100 million more than i thought. this is a quarter where they have a lot of billings, but if sales force doesn't go up, then you will see the softwares and service group go down which is

in control right now in terms of the negative mindset for the russell. if sales force turns around this morning which is certainly a possibility, the analysts like it, including the bernstein analysts who have been quite negative, you will see a netflix tailwind and that group will come back. the lockup expires, more than 80 million shares and the stock's knocked down. it sells at an extreme valuation, the highest of any i follow. watch that one. it's another tell. >> you told us it would be an important interview. here's a bit of what he told jim last night on "mad money." >> we have had a great quarter in financial services. of course, we have a great relationship with the bank of america, continues to be a great customer of sales force as well as many of the major banks and one of our largest transactions of the quarter was cigna which the insurance industry has really performed well for us this year. >> look, in terms of the customers, you have bank of america, you have walmart, you have home depot. if you go to home depot.com you will see the foot prints of sales force.com everywhere.

major call-out on the home depot call was how terrific their web business has been. those of us who use it in small business are continually impressed. cigna dovetails with manulife, john hancock. sales force has a lot of momentum and a market that doesn't care. i told mark last night, i said listen, in the end they want earnings per share, they want dividend, they want buy-back. he said they want customers who are happy and that's what we're about. the market does not want that. the market wants to see this notion of buying back stock and giving dividend. sales force.com is issuing stock and paying no dividend so let's see if the market can satisfy a price to earnings multiple existence and a price to sales existence, because sales force.com is really cheap on a price to sales versus its cohort plus 30% growth but does the market really want growth or does it want growth at a reasonable price. if it's the latter, then you don't want to own sales force. >> finally, it does appear that

google is gearing up for a global shopping spree. in this letter to the s.e.c., the internet giant says up to $30 billion is being set aside to help fund planned global acquisitions of companies and technology rights. in the same letter, google says it passed up on a potential deal worth up to $5 billion late last year, although they did not name that company. that's raising eyebrows today. >> no, they didn't name it. this is not unexpected in the sense of you got a company that generates more than 50% of its revenues overseas. we all have spoken a great deal about tax inversions, for example. one of the key reasons that so many companies are looking at trying to invert, in other words, find a different tax jurisdiction, is not just to get their tax rate down but also to get access to their overseas cash so they can actually invest it perhaps back in the u.s. without paying taxes on it. that's another great advantage of doing these inversions. i'm not saying google is looking to invert. i simply point it out because they have a great amount of cash overseas, given they generate so much business overseas.

obviously they are going to use it. they don't want to bring it back. as many corporations don't, and pay the taxes. so they are going to use it to continue to build out their presence overseas. not a huge surprise. the numbers themselves are pretty interesting, given just how big google is and how much cash it generates each quarter. >> david raises a great point. i have regarded google as a european company, not unlike some of the bigger industrial companies like ppg. if europe comes back in a big way, howard schultz saying europe is coming back in a big way, sales force.com had very good numbers in europe, then you would see google do quite well. in the meantime, listen, the stock is up. do we really want them to do another acquisition? every acquisition is perceived as being terrible these days because people think they overpay. there will be a speculation game. oh, $4 billion, but people blast me saying he's trying to promote yelp. no. i'm saying people want acquisitions that build up verticals. i have grubb hub on tonight,

regarded as the amazon of food, yelp regarded as the amazon of yellow pages. you want focused acquisitions of companies that haven't had their stocks really inflated and that's very hard to find. >> before we go to break, give us a taste of what we will talk about with maffei this morning. >> so many different things to talk with him about. obviously the portfolio at liberty itself, sirius, for example, which i know jim and his viewers on "mad money" follow so closely, we will talk about particularly given the stock down. also, consolidation, which they started but they didn't really end up finishing. in other words, it was a year ago when i reported that attempt by charter and liberty, liberty owning 27% of charter, to try to buy time warner cable, get them in a conversation. a year later, we have seen the consolidation occur. they have been part of it in a way but not a big part. i want to hear what he thinks about that. the barnes and noble exit. we could sit for a half hour and talk. people want to hear what he has to say given they have so many different windows into so many

different parts of the media landscape. >> he must be listened to. he's a warrior. that's a fantastic get. we all know him from even the old days. that man can comment on anything and he does and he is also delightful. that's a terrific interview. >> that's coming up later this morning. in the meantime, there is something that cisco's john chambers says will be brutal in the tech world. details on that straight ahead. and la quinta out with its first quarterly numbers since its i.p. in april. we will discuss. take a look at futures. not too bad premarket action. we got four fed speakers today and the minutes coming up. >> and cyberattack on pay pal. not compromised, of course. with all the opinions about stocks out there, how do you know which ones to follow? the equity summary score consolidates the ratings of up to 10 independent research providers into a single score that's weighted based on how accurate they've been in the past.

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breaking news this morning out of ebay. the company is asking users to change their passwords. a cyberattack, they say, compromised a data base containing encrypted passwords and other nonfinancial data. they say there's no evidence of any unauthorized access to financial or credit card data. but this is never a good initial headline. >> no. paypal, i always thought, was -- never this but one of the

reasons why it has done so well is people kind of felt that somehow, this thing could never be hacked and i think we have to say never say never. remember, fireeye and palo alto networks try to fight that. important to say they didn't say compromised, in case people say we are being incendiary. not at all. >> they say they are aggressively investigating the matter. mean time, cisco's ceo john chamecham e chambers has a sobering message for the future of i.t., saying quote, you are going to see a brutal, brutal consolidation of the i.t. industry where out of the top five players, only two or three of us will be meaningful. in as quick as five years, we know we have to change. his presentation littered with names like avia and nortel and names we don't talk about much. >> i think john makes sense. he's got the momentum of all the companies and you have always been waiting, he's a crouching

tiger, hidden dragon. when they get this thing right, they can really go all-in. they can cut price if they have to. obviously they didn't have to this last quarter because it was so good. i think it is natural to remember at one point there were only a few companies, then there was cisco and then a big proliferation. i think it will swing the other way again. i would not want to go against cisco here. they have the momentum. >> he does call out ibm and hp as companies that have had a tough 18 months. >> yeah. well, listen, we know they are both in transition. we will be speaking with meg whitman in a couple days, in fact. hp will be reporting its quarter, if i'm correct, after the close tomorrow. we get a look at how that turn-around continues. sure, those are enormous organizations. can they respond to the rate of change as it only dramatically increases each year is the key question. can they compete in various markets they need to. we have heard from ginny rometti saying they can. meg whitman says we absolutely will and are. it's not as though chambers

doesn't have his hands full as well trying to compete. yeah, they are coming off a good quarter. you seem to be taking an awful lot from one quarter. >> well, i just was so glad to see some carriers hiccup. enterprise, a lot of people are missing the boat. even with caterpillar yesterday, they say industrial doing quite well, enterprise is doing quite well. that's what i have been waiting for for chambers. i know we don't have a lot of government spin which has really hurt everybody. the gridlock in washington has hurt a lot of companies that do government business but last night, mark was saying there are a lot of faux cloud plays. there are a lot of companies in the telecommunication industry that do need to merge. there is too much capacity in the internet of all things. there is too much capacity in the trillion points of contact and connectivity. i think a shakeout is right. doesn't necessarily mean things are bad for the industry. just there are going to be fewer

players. >> yeah. amazing presentation. worth going back and seeing what chambers said. when we come back, we get cramer's mad dash, countdown to the opening bell on this wednesday.

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just about seven and a half minutes before the opening bell. let's get cramer's mad dash. yesterday, dick's tells us golf is not doing well. today, pet smart says pets aren't doing well. >> the challenging and volatile consumer as a pet owner, i have

to tell you i have never felt that wow, i want a dog, i don't want a dog, there's -- >> it's like being a little bit pregnant. you do or you don't. >> you're not challenged if you like pets. i found this to be interesting. there are a lot of analysts who were sensing something was wrong here. but something may be wrong with the execution here, too, because i think we all know pet owners, pet lovers know we don't run hot and cold pets. we don't worry about income when it comes to taking care of our pets. those are never sacrificed. >> when a day in the energy complex. we got this historic natural gas deal between russia and china, and libya. people forget, libya at one time was pumping three million barrels a day. it's going down. it's been 700 to 1.4 million. libya looks like it could go offline again. big civil war there. conaco price target reach, remember, i have come on every day and talked about the north american plays, it's eog,

pioneer, you know what, we are pumping like mad. libya going offline, maybe that's why oil has been so sticky and high. watch oil, watch the domestic plays. if libya goes offline, you will read about it and bingo, yes, russia with china, that's interesting. woodside backed away from an important deal. break the hammer lock of russia. looks like that's not happening. >> you have not been historically a huge fan of integrated versus some of the smaller companies, right? >> well, the smaller -- i like companies with 30%, 40% growth. it used to be that you bought sales force.com. now you buy eog. but you know what, the stability of chevron is intriguing to me. this stock has been like -- this stock has been wow, look at this, it shows absolutely nothing when i do that. you know what, i look like an idiot but that's okay because that's nothing new for me. i do think conaco is the strongest performer because it's linked with natural gas and oil. >> interesting comments from rick perry yesterday regarding --

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with thinkorswim from td ameritrade. you're watching "squawk on the street" live from the financial capital of the world. opening bell in about two minutes time. we are coming off the three-week low on the dow. although interesting, even though we're at the street we love, the dow and s&p have not had a losing streak longer than two days since april 3rd through the 7th so it has been sort of that back and forth pattern and if you were lucky enough to buy the s&p on february 3rd, you are up 7% this year. >> you know, i didn't know that. it's funny because we have a couple down days and immediately i start hearing people say recession, because they're looking at interest rates. i think interest rates are way too high. look, the idea of a 20 cent correction because we are down a couple days. i'm urging people to use this

selloff to buy high quality industrials, particularly the ones that will become high yielders. i cannot predict a 20% correction because i'm stuck with the facts of how companies are doing. but that's okay. the karma correction and the recession we have had to deal with them now since 2010. these are phantoms. but i know they spook people out. i'm trying to get people to not spook out. take a little bit of a warren buffett approach here. >> it's difficult when the bond market is telling you something that's open to interpretation. >> i think it's telling you that we should never have been near 3%, that last year's summer correction in bonds shouldn't have occurred. i'm relying on frank blake. i think frank blake, the ceo of home depot, knows more about housing than anyone in the country and he is also mild-mannered and a terrific guy. >> on that note, we do have an upgrade today from goldman out of aig. >> that's a shocker. that joins bernstein in the capital return theory.

remember, benmosche requiring. this stock has been the horse in the group other than travelers which people were worried about price competition. it seems to have died down. >> there's the opening bell, perfectly timed. a lot at the s&p at the top of the screen. over at the nasdaq, valmette, a supplier for the pulp and paper industries. >> that's a company to watch today. sales force.com. this stock was being hit by shorts all last night and 51, 52. if this stock ticks at 53 1/4 there will be people who cover. there will be people who feel they have to cover their short. stay tuned. if it doesn't hit 53 1/4 we won't have that reaction. >> that will be the locus of our attention today. revisiting some of the troubled stories from yesterday, dick's, i think at least five downgrades of dks today. >> what were they thinking?

jpmorgan, credit suisse, three things have to happen there. they got to double down on golf which is completely stupid. jordan spieth, know kevin planks made his bed with that guy but we know golf's not good. second, hunting, you want to go hunting, you are a gun enthusiast, my family gun enthusiasts, you go to cabella's, not dick's. finally, maybe it's time for ed stack to think of the next phase of his career because this was really, really a series of wrong bets he's made. i really like him but it's not working. >> i would argue an inordinate amount of attention to the quarter this time around. it's all over the place. tiffany will be your lead gainer this morning, up almost nine. >> when you have this kind of quarter where you have gross margins going up, where you've got the sales going up worldwide, improving gross margins, 50% increase in earnings, what you say is wait a second, we were saying staples is the economy. hey, you know what, maybe

tiffany's economy. look, tiffany, nordstrom, they are doing quite well. i say it's a split picture here. home depot which is very hard to beat amazon, tiffany, let's say focused on howard schultz's theory. if you are able to beat amazon your numbers are bad. staples very much in the cross-hairs of amazon. if you're not, tiffany is not big on amazon. they are not big on vipshop. enough, already. tiffany is proprietary. >> american eagle is one of the retailers we are getting out this morning. you thought the comps were respectable given expectations? >> i think that industry, when you are trying to figure out -- here's an odd one. urban outfitters seems to have that figured out. all these other guys, when you go to american eagle and buy a pair of flip-flops, i price check flip-flops. but you end up saying oh, my

god, flip-flops here, there's no reason for these guys. there is just wow, you know, we are soulless, soulless teenaged retail. i will put abercrombie in, enough with the six-pack, enough with the pornography. give me solid clothes. give me jc penney. >> give me the weekend to get through. >> memorial day, jc penney will be too crowded. >> bill miller with some comments regarding value and a couple of his favorite names. apple included. take a listen to this. >> apple's a major position for us. our cost on apple is probably the low 400s. it's not as attractive as it was but still worth 700, 750. >> he's not calling for the big correction. he's had major, major wins including the airlines,

american. bill miller you could say runs hot and cold. when he's running hot, he runs hot for multiple years. i come on and look, if he said i'm nervous, like dave tepper and i think you should raise cash a lot, it would make me rethink. what dave was basically saying is get off margin. we then interpreted his call as being he doesn't like the market. then we see some of his holdings, he's buying some of the highest flyers. stick with bill miller and you won't get hurt here. i stuck with him during the lean times, i stick with him now. he's done a good job. he's a stock picker's tire kicker and he's rigorous. rigorous man. >> speaking of names like apple and amazon at least, today's the day that all those old hbo shows start streaming on amazon prime and you mentioned netflix moving into not just france and germany but four other european markets. we know what an important story international is. >> yeah. one of the things i was looking at, i'm debating the surface. i want a 12 inch screen.

i watch a lot of things on my smaller apple. don't get mad at me. people are spending a huge amount of time watching things on their hand-held and that's one of the points i think mark subtexted his call and also on their tablet. the tablet's not dead. i thought microsoft did a decent job. >> the service got some good reviews. >> yes, it did. thank you. the "usa today" guy said i got to check this thing out. >> even the "new york post" snarky as they are called it a surface missile. it ends up being a little bigger and with the laptop in the cross-hairs. >> maybe the "new york post" always had fun. look, microsoft can get things right. there's no law written that says microsoft must get it wrong because xbox is the most popular gaming system. there is not a big intersection between people who gain and people who invest. if microsoft would rename itself and call it xbox soft or

microxbox, stock would take out 42. >> good point. with all that, we are getting some of what we lost yesterday. dow is up 82. bob pisani is on the floor. >> happy wednesday. nice strong open here. materials, financials, energy, health care. everything is basically on the upside. i want to give you the score card for retail and show you the way we look at it every day here. the good news is, six retailers reporting, five of them beat but that's not the way you look at it. you look at the guidance. a bit disappointing. tiffany was a very pleasant surprise but there are reasons for that well as well, guided higher. lowe's basically reiterated. that's all the situation right now. still very mixed reports here. lowe's said essentially the same thing home depot said yesterday. performance was improving in may, together with our strengthening execution gives us confidence to reaffirm our sales and operating profit outlook for

the year. here's the down side. this is what everybody on the street is talking about. the underperformance compared with home depot. i'm specifically talking about same store sales. home depot, up 2.6%. lowe's same store sales up .9%. this has been going on for awhile now, that outperformance from home depot. they have been reshuffling their senior management at lowe's recently. maybe that's a problem. maybe it's not helping at all, i don't know. but that's the key metric the street is looking at right now. tiffany's really impressive but you got to look under the hood here. earnings were strong worldwide sales up 11%, huh? i had it up 4%. everybody else did. that was a big beat. americas up two percentage points at 8%. asia was strong. china and australia had good sales. japan was the big one, 30%. that's because a lot of people tried to beat that consumption tax. so a lot of people are sort of discounting that japanese number. europe was a disappointment.

most analysts had 2%, 3%, 4%. europe was a disappointment. take a look at tiffany's. overall, still pretty good but you got to back out japan and what happened for japan. elsewhere with the retailers among the three there, american eagle, pet smart and target, you see two of them are down. pet smart down a lot. guidance disappointing. target up fractionally as you can see there. i want to mention the big ipo tonight. i have been talking about jd.com. i am giving it more attention than you normally would because this is the runner up to alib a alibaba. they are the largest online direct sales company in china. this is a big ipo. almost 100 million shares at $16. you are dealing with a significant amount of money, a billion and a half dollars, maybe $23, $25 billion market cap. this would be the third biggest ipo of the year in the united states after allied financial earlier in the year. people want to see how this is as a sort of precursor to

alibaba. what's the appetite. the problem is, as with the ipo market, all stocks in the ipo market, this is heavily dependent how the market is doing now. the overall stock market sideways, some are arguing slightly down. the china market is not doing that well. a lot of people are watching this very carefully to see if it can get some kind of same-day pop. the average here for ipos this year, particularly in the china market, is about 10% pop on average. so we'll see if they can pull that off. again, the pricing, you will want to price right in the middle there. if it prices below expectations, that will not be a good sign for future chinese ipos. back to you in a very nice day. dow up 1 e100 points. >> let's get on the bond pits. rick santelli is at the cme group in chicago. good morning. >> i know there is always ongoing debate but once again, let's keep it simple. where's that dow? up triple digits. let me think. blindfolded, where might

interest rates be? little higher, you think? it continues to be the dynamic to pay attention to. look at the one-day chart of tens. rates are up, dow's up. look at the two-day chart. we opened up yesterday and rates were up for part of the day, then they went down. why? because the equity markets really started to sell off. they were down about 111 points before any fed speak, because i still think that everybody's clock has been broken. seemed pretty clear to me yesterday. 12:30 eastern when we had the first fed speak hit the wires unless somebody had a copy the traders didn't see and the break really started before that. if we look at year to date of tens, we can see of the selling was in the first four and a half weeks. then it was really dropping but we never really retraced. just sideways. this is important. because this is the stencil to pay attention to. if this market is going to reverse rates higher, it needs to clearly start doing a lot of

trade above a 2.60 yield. three basis point slippage. look at a two-day chart, you can really see it, but look at boons versus tens. if this is the other dynamic of why interest rates are tame in the u.s., if this spread starts to tighten from nine and a half year wide, could make a difference. want to pay attention to that. look at the two-day of the nikkei. traded down well under 14,000 briefly, closed above and even slightly down on the day, look at the year to date chart of the dollar/yen versus ten year note yields. all of this continues to tell me on a correlation basis you want to pay attention to the dollar yen if you are looking at yields. back to you. >> rick, thanks very much. rick santelli in chicago. when we come back, david's interview with greg maffei.

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take a look at the markets there. dow's up almost 100 points, 16,470. s&p up to 1881. we keep bouncing off technical levels here. >> your point about the dow and how strong it's been flies in the face of those who are saying you know what, it's all over. the all over crowd and the recession crowd kind of took hold yesterday between 1:00 and say 3:30. you really heard it all over the place. i think you have to take a home depot, when they say may was good and measure that against what dick's is saying. i find that things are kind of not as great as i would like, but not terrible and that's not the stuff of a recession. tony crescenzi was talking about

the economy getting better. nonresidential construction is good. residential is not that good in part because what frank blake said which is mortgage rates have to come down. now that they're coming down, we can't say that's bad. >> not to mention the percentage of homeowners under water now is beginning to -- >> they can refinance again but i think there's not enough inventory on the market. frank made that point. i'm speaking of the ceo of home depot. the home price appreciation has surprised him which is a positive, not a negative. lot of people feel people being priced out. he did say there are still credit issues but he's saying household formation is really at the crux of what's going on here. 18 to 35s are still living with their parents at a record level. that i think, people are forgetting about it. >> google has overtaken apple to become the world's most valuable global brand. a research firm values google's brand at $149 billion, helped by innovations like google glass.

ibm, microsoft and mcdonald's round out the top five. >> google is selling at 16 times next year's earnings. this is a remarkable growth machine with a programatic ad campaign which is meaning they are taking more and more share. i believe yahoo! can have a turnaround because of the alibaba money but google pulled away from everyone. you are talking about a company that could get 75% share but it's not a liked company. if you look at the chart, people walked away from google. they don't want to own it. it's been a very tough own in the last three months. very tough. >> speaking of mcdonald's and tough owns, stock's not that far off a 52-week high but they are facing a couple thousand protesters this week at the annual meeting in oakbrook, illinois. this new mascot for the happy meal has been ridiculed on social media. when you're yielding what they're yielding right now, easy to look past that stuff. >> that's the thing. people say how can target

bottom. we can find a company that only needs one good quarter to take to 110, there was a price target rise yesterday, that's what would happen. they report a good two months, you will see that stock at 110. if target reports a good quarter, you will see that stock at 63. people want to buy things that are down with good yield, because yield still works in an environment where we do think ultimately rates are going lower, not higher. i think that's becoming the trade. people have to recognize mortgage rates went up too much. interest rates went up too much. fed not issuing a lot of bonds because the deficit's coming down courtesy of the republican and democratic logjam and the fact the european numbers, we got numbers from the treasury last friday. talked about how many bonds are being bought overseas. $200 billion pickup in the month, just in the last three months. we don't have april numbers yet. be aware, the europeans are fleeing the bond market and coming here. rates going lower, feds should stop buying back bonds. >> there is no moat between us and them. they can buy as easily as we can. >> i once bought a lot of dutch

bonds. i was a very complicated trade. you had to do the gilder between certain hours, there was a delay, the guy might be off the desk. i just bought $5 million dutch bonds. come on. that's terrific. i will sell the american. that's going on. it's global. >> when we come back, it is stop trading with jim. when folks think about what they get from alaska, they think salmon and energy. but the energy bp produces up here creates something else as well: jobs all over america. engineering and innovation jobs. advanced safety systems & technology. shipping and manufacturing. across the united states, bp supports more than a quarter million jobs. when we set up operation in one part of the country,

people in other parts go to work. that's not a coincidence. it's one more part of our commitment to america. can you start tomorrow? yes sir. alright. let's share the news tomorrow. today we failrly busy. tomorrow we're booked solid. we close on the house tomorrow. i want one of these opened up. because tomorow we go live... it's a day full of promise. and often, that day arrives by train. big day today? even bigger one tomorrow. when csx trains move forward, so does the rest of the economy. csx. how tomorrow moves.

that corporate trial by fire when every slacker gets his due. and yet, there's someone around the office who hasn't had a performance review in a while. someone whose poor performance is slowing down the entire organization. i'm looking at you phone company dsl. check your speed. see how fast your internet can be.

switch now and add voice and tv for $34.90. comcast business built for business. it is time for cramer and stop trading. >> rick santelli had really good points when he was talking about bonds having an impact on stocks. when the interest rates have gone up, people then gravitate to the big industrials and you see it constantly. you just look at caterpillar, look at a company like cisco which is regarded as industrial. when rates go down, they want to own some of these higher growth. i say again, sales force was down $1.80. it is now down $1. fire-eye, remember, the lockup expires today. 82 million shares but we saw no secondary file.

that's 18 times the enterprise value to sales is the highest of any company when you look at fire-eye. look at data, tableau, ringing the bell, that stock was down $1. it's now come back a little bit. can these stocks exist in an environment where rates are actually going higher. can these exist in an environment where we want earnings per share. today is the most important day because sales force.com started the decline february 28th when it went from $66 to $68 -- >> it was essentially victim number one. >> right. yes. exactly right. it was ground zero and the radiation spread because people didn't care that their operating cash flow was bountiful. last night, the operating cash flow was off the chart for sales force, $100 million more than i looked at. people were immediately commenting on twitter saying they just beat that. listen, beating a penny again was good for about 200% appreciation sales force. so watch that. the world changed when sales force went down on its good last

quarter. can the world change again? i don't know. i like the companies that sell at a discount to the market multiple with a 3% yield and a big buy-back. sales force is the opposite of that. but sales force is the fulcrum of the day because we got a big rally in the industrials. that's where i want to be. >> you mentioned fireeye as opposed to trial by secondaries. are you impressed the sellers have not been more forceful? >> sellers aren't there. >> stock up 3%. >> fireeye, my relationship with fireeye, let's just say it's not that great, and the fact that the stock is hanging up here and not taking out these mid-20 levels, remember, this is a security company. when you see something like paypal, when you hear about target and they were able, i believe, they had a relationship with target, they were like the good guys, believe me, i just say this is an expensive stock but it's not coming in. it looks like the big sellers don't want to clear out. there's a huge short position in fireeye. there is huge short position in all of these. by the way, remember, 18% of the s&p is banks and banks need

these rates so much. we didn't even talk about jamie dimond and his return to detroit. >> $100 million over five years in loans and donations. he calls it investment but this is to attack housing blight, renewal, job training, all the thing detroit so badly needs. >> immediately people say hold it, if he were to give his salary to detroit they would be able to have a new symphony or artwork. i can be polemical. when rates go higher, more stocks go higher than lower now. is that right? it's not my job to decide that. it's stupid. but you know what, it's working. >> gm did have another recall today. a quarter million avios for a fire risk. >> my advice to gm, my charitable trust is long it, they ought to just say we are recalling every car. i'm not being facetious. if you want to come and check your car out, because just in case you're worried, we have

everything under control, bring it in. because general motors sales have not been hurt at all. this is obviously a company that has adopted a new cautious level. why don't they just say look, if you're worried, come in. we will give it a look-see. >> you just named the headline in "usa today." are there any more, any gm cars left to recall. >> they ought to recall those, too. look, i'm not -- if i were ceo of gm, i would say look, bring your car in. we are going to give it -- if there's anything wrong, we will find it, we know all the defects, we promise and we will give you some guarantee and give you $500 if you come in and just take the darned charge and get ahead in this for once. they haven't gotten ahead of it yet. phil lebeau is ahead of it. they are behind it. phil lebeau, unless they make him ceo of gm, they still won't get ahead of this thing. >> finally, grubb hub? >> grubb hub is the amazon of the restaurant business. my restaurant, we had a crew there, we are not going to send

delivery because we think it cheapens your own brand. a lot of companies are getting involved. i want to know if they are indeed the amazon of restaurants, meaning you don't have to go anywhere, you go on your tablet or hand-held and order the food, is it really working. people love it, there's millions of customers. and air lease, the engine of growth was housing, the second engine was aerospace. i still think aerospace is good. people don't agree with it. >> "mad money" at 6:00 p.m. eastern. when we come back, faber with greg maffei. we're moving our company to new york state. the numbers are impressive. over 400,000 new private sector jobs...

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welcome back to "squawk on the street." dow's up 127. our road map begins with retail today. earnings from target and the little blue box, tiffany, telling very different stories. we will get all the numbers from both of those companies. >> then the ceo of la quinta joins us for an exclusive interview following its first quarterly result since going public. >> liberty media's ceo speaks to us exclusively about the cable industry and the future of

media. faber's got that. >> and the ceo of fiat chrysler joins us live, five years after the auto bailout and in the middle of all the gm controversy, another "squawk on the street" exclusive is coming up. but we start with the markets, in the green this morning. dow up triple digits as you can see, a rebound across the board including from the nasdaq, up .6%. retail stocks are drivers of this market right now, with all of the earnings. we will start there. tiffany's shining in its first quarter while target takes some hits. courtney is back at hq with all the details. i see tiffany trading at a record high. >> really amazing numbers here but going in two different directions. the retail parade marches onward. we have earnings from the bull's eye and the little blue box. we start with tiffany earnings shining on the iconic blue box retailer. beats consensus by a wide margin on the bottom line, an increase of 50% year over year with revenue coming in stronger as well, up 13%. tiffany also raises full year

earnings forecast, above wall street's current expectations of 4 .17. global same store sales gaining 11%, more than double the 4% increase expected. the ceo also notes tiffany has seen strength in fine and statement jewelry. sales of the newly expanded jewelry collections accelerated as well. target reporting first quarter results this morning, too. that retailer has been making a lot of headlines lately, including the announcement that both its ceo and executive in charge of canadian operations have been let go. the big box retailer falling shy of wall street's profit expectations boy a penny but beating on revenue and same store sales for the quarter. however, target also issuing disappointing guidance for both the second quarter and the full year, adding that costs associated with the data breach can't be estimated at this time but quote, may have a material adverse effect on results in the second quarter, the full year and future periods. traffic in the u.s. fell more than 2%, the sixth straight quarter of declining traffic.

canada, too, remains a problem. gross margin rate of 18.7%, nearly 20 percentage points, not basis points, below last year. i will speak exclusively with target's interim ceo and current cfo john mulligan on "street signs" this afternoon. got a lot of questions to ask him. >> looking forward to that, no question about it. it will be interesting to hear what his strategy is even though he's the interim ceo. courtney reagan on retail. let's dig deeper into the target results, bring in the managing director with stern agee. he's the interim ceo but what's on his to do list at this point? >> his to do list is very long and very detailed and i think there is a lot of issues that need to get fixed in the u.s. and in canada. i think in the u.s. the most disappointing statistic that came out of the release this morning was that their task down over 200 basis points on a two-year basis. it's almost as bad as it was in

the fourth quarter. red car penetration dropped for the first time ever to 20.4%. they have got their work cut out. i think the company's getting a little bit of a free pass today. expectations are pretty low. but this is a company that's got a big road ahead. >> obviously there are broader problems in the retail sector. we saw tough results from urban outfitters, from staples, declining traffic, shift to online. some of the weather problems. how much of it here is target specific, sort of losing its identity, the data breach and the canadian problems? >> good question. i think a lot of it is target specific. i think their brand equity has significantly eroded over the past decade. in the late '90s this was a company that had a lot of mind share with consumers and i think they have lost that. that's evident in their traffic. to your point about retail, back in the day, if we had april comps, my gut would tell me that april numbers would be pretty soft across the board which is

kind of surprising given -- >> they were up 1% in the month of april across the country. >> the consumers are under a lot of stress, everybody from vitamins to apparel to discounters. frankly, the only company out there that's really putting solid numbers out there in my group in particular is costco. >> chuck, it's yielding 3%, more than walmart, more than costco. are people being too easy on it because of that? do you think they are in danger of getting into something that could get worse? >> i think the latter, to be honest with you. it feels a little like a value trap to me. if you look at their guidance for gross margins, they just are simply too high structurally. they got walmart on the left, costco on the right, amazon behind them, and the path to getting there needs to be on price and rebuilding the brand and unfortunately, that comes with a cost. i think it's setting up to be a little bit of a value trap right now, to your point, it's got a

good yield. the valuation does give it support. they do generate a ton of cash. there is obviously optionality they do with an incoming ceo, what they decide to do in georgia. we have a $54 price target. i think it's dead money for the time being. >> the last ceo, lest there be any doubt, was actually fired and his severance pay is slightly lower than some people expected, albeit above $20 million. does that change anything that the board felt there was an individual issue there, a strategy issue, they could in effect raise and turn their back on? does that signal change to you? >> i think -- good question. i think it's a little more of a signal that they were concerned about the u.s. business more than what happened with the credit breach and more than what was going on in canada. i think greg was a great ceo. i just don't think he really embraced the online world as much as maybe he should have. if you look at what macy's and

nordstrom and even walmart are doing online, you compare that with what target's done, they are multiple years behind. i think that's probably why the change happened. it probably in retrospect will be a good decision. >> very quickly, i don't get it. target used to be cheap, chic, it was cool, it had all the cool partnerships with todd oldham and other designers. how did it lose its way? how did it lose its identity here? >> i think it comes down to the products they were bringing in the store and if you go across every category, i think walmart was beating them up for a long time. if you look at home and compare that to the strength in the past few years from home goods to pier one, you just look at their apparel business, they brought in a lot of private brands that just didn't drive interest from the consumer. i think that's really kind of what it is. >> chuck, thanks for the push-back on target. over to simon with another mover on the floor. >> in its first quarterly

results since returning to trade on the floor, la quinta inns and suites has beaten expectations. lq shares as you can see today have just popped above the $17 a share that blackstone priced them at back at that ipo in april. joining us now exclusively from texas, wayne goldberg, lq's president and ceo. welcome back to the program. it seems like only yesterday. >> it does. i'm glad to be here. thanks for having me. >> given the state of the industry at the moment, which looks very solid, and the pipeline that you have, a lot of analysts are wondering why you are being so conservative on the outlook. why? >> well, we feel very good that the results we posted at the close of business last night and the guidance that we have given are reflective of the strategies that we have said we were going to execute. i think that we are going to continue to execute against those strategies and i think we will continue to deliver

positive results. i feel very good about the first quarter. i feel very good about delivering against the results that we have said we would achieve for the rest of the year. >> you know, i didn't mean to interrupt you, it is fiercely competitive out there, as you know better than i. how are you going to grow in particular the franchise side of the business, the asset light, the high margin side, when everybody else is after those same property owners? >> well, for us, it's relatively simple. we have been, according to data provided by smith travel research, we have been the fastest select serve primary select serve lodging company in the space for the last ten years and the last five years, and we still aren't represented in 37% of smith travel research's 628 market tracks so as we continue to focus in market tracks that we're not in, we will continue to grow our brand pretty significantly. i will give you an example on

our pipeline, for example. our 186 property pipeline, 10% of that pipeline today is international. 16% of that pipeline is urban according to the definition of smith travel research, and that will also put us in 35 new markets that we are not in today that are considered smith travel defined market tracks. >> you know, if you look at the analysts' comments, no one has any doubt you are energetic, you have a strong culture, you are very focused on executing and you obviously spent a lot of money to try to take the brand upmarket when it was private under blackstone. however, i think from the sort of comments i'm getting that you're not entirely satisfied with the perception of the brand and the fact that it is as upmarket as it is. people may not be recognizing that in some instances. >> well, again, i'm personally never satisfied. we are an organization that's never satisfied. we are always looking to be better tomorrow than we are today. but what i will tell you is if

you look at our business, it is a very simple business. we have two segment, a franchise segment and an owned segment. if you look at our owned segment, for example, 98% of all of our revenues come from the sale of a room. it's very simple and in the first quarter based on what we reported, if you look at our results, we had in our own segment and our franchise segment, we have rev par growth, revenue growth, rev par index growth and in our own segment, expansion in ebita margin and in our franchise segment, we have high margin unit growth where we opened an additional 12 properties, an additional approximately 1200 rooms in the first quarter. we feel very good about our growth and our brand and how we are positioned today. >> you know, there are two very important questions i want to ask you. one is about the debt, you have $2 billion in debt. at what point can you switch the free cash flow away from paying

down that debt, and the second question which i'm sure you encounter all the time, is that blackstone still owns 63% of your float. that is a big overhang. that worries investors. what do you say to them about when blackstone might sell? >> to your first question, i would say on the debt, we are very focused on delevering and continuing to delever our balance sheet. we have a very very solid capital structure in place. our debt is very attractive and again, you will get to a point where you want to make sure that you don't overleverage what is really a real asset on long term. we have a very flexible debt. once we get delevered to the right levels, we will be looking for the way to return value to the shareholders rather than use all that cash flow to continue to delever like we have strategically decided to do in the interim. as far as blackstone, what i would tell you is i can't speak on behalf of blackstone. however, i can tell you they

have been excellent partners. we took this company public because they want to participate in the continued growth and value of this company. they know there's continued value in growth available in this organization and they want to participate in that. i can also tell you they know how to do this and as the largest shareholder of the company today, they're not going to do anything that's going to degrade the value of our company or our shares because that impacts them more than anyone else. they will be very disciplined in their approach and i feel very good that all of the shareholders will be rewarded here. >> good to see you, wayne. thanks for sparing the time. wayne goldberg joining us from texas from la quinta. >> thank you very much. dow is hanging on to the gains, up 125. let's get a market flash from dom chu. >> good morning. check out what's happening at pet smart. pet smart is down, the stock in the dog house with investors after cutting its full year outlook as its first quarter sales missed expectations. pet smart sales off their session lows. still, they are down 5% on the

day. one to watch. back to you. >> when we come back, an exclusive with liberty's ceo. we will hear what he has to say about all the deals in the industry and the future of cable television. later on, fiat chrysler's ceo joins us live for an exclusive interview five years after the bailout and in the midst of all of gm's recalls. she keeps you on your toes. you wouldn't have it any other way. but your erectile dysfunction - it could be a question of blood flow. cialis tadalafil for daily use helps you be ready anytime the moment's right. you can be more confident in your ability to be ready. and the same cialis is the only daily ed tablet approved to treat ed and symptoms of bph, like needing to go frequently or urgently. tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. do not take cialis if you take nitrates for chest pain, as it may cause an unsafe drop in blood pressure. do not drink alcohol in excess. side effects may include headache, upset stomach,

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we now head down to washington, where david is joined by a special guest. hey, david. >> hey, carl. that's right. i'm joined down here in our d.c. studios by greg -- i am joined by greg maffei. there he is. the ceo of course of liberty media. and all that that means. it means a lot. nice to have you here. >> thank you for having me. >> you are very welcome. >> i said this is the most amazing backdrop. it's real. >> it is actually real. i know. most people would think it's a green screen. it's actually the capitol. a year ago, i reported that you, john malone, tom rutledge were interested in acquiring time warner cable. a lot has happened since then. consolidation has happened that you were speaking about that was necessary in some ways for the cable industry. but you guys didn't end up buying time warner cable. at & t and direct is another deal that's just come upon us. here we are a year later. did charter get left out and are you frustrated by what happened,

our initial foray to try to buy time warner cable? >> well, first, charter didn't get left out and i don't think charter and liberty are frustrated. to some degree, us going after time warner cable was the mouse that roared. time warner cable was significantly larger. i think we showed as a company, charter showed its vulnerabilities, time warner cable its vulnerabilities. obviously they have moved into the arms of comcast. but if a year ago you had said before all that news broke out and i think actually a year ago it hadn't yet come out -- >> i think it was june. >> yeah. that charter was going to nearly double its size, was going to reconsolidate and concentrate its businesses so that some of the scattered subs that we had on the west coast and east coast were divested and we swapped into a much more concentrated footprint, we would do that at seven times ebidta to put our

foot on the spin co, that we would reduce our fios exposure, i think we would have come in and said home run. couldn't be better. it's a great result and we are very excited. >> it's only contrasting with what might have been. do you go back and look and say well, gee, was there a way for us to work this properly so that we could have ended up with time warner cable? was there a way to choreograph it knowing comcast was always there but figuring out a way to keep them from doing it perhaps by getting it done very quickly instead of having it stretch out over such a long period of time? >> well, it was a complicated deal. it was a deal that as you know, we had discussions with comcast along the way about other structures and them participating with us. those ultimately didn't come to fruition and the reality is comcast is a company that is roughly eight to ten times as large as charter and if comcast wanted to do it, we always knew that was a risk. >> are we done with consolidation? with at & t and direct occurring

as well. >> well, i think as you rightly point out, a wave of consolidation got kicked off by that. i think there's more to come. but a lot of the big pieces have already happened. there are fewer alternatives left of huge scale. >> right. comcast certainly can't do much of anything. >> i think comcast is done. >> when there's more to come, charter clearly can grow. with the four million subs you are taking from the time warner deal, you will be, what, 12 million? >> at about eight, eight and a half. >> you could go up from there. charter could. you expect that will be the case? >> well, i think tom and his management team will certainly look at anything that comes up. if you think about who is the natural acquirer of what comes up, we now are the largest company with synergies to buy things for the natural buyer, strong stock price, strong operating team. i think it's very logical that things that arise will come to

us. >> at & t and direct, does that deal make sense to you? >> it probably does if you are at & t. if you are direct, i think it does because your path -- >> you guys once a big owner of direct. >> i still am personally an owner. they have done a great job. but i think the strategic options are fewer for them going forward and i think at & t does give them incremental things to do. if you are at & t, i think it's probably a good financial deal and a positive strategic deal. not a massive game changer but a positive. >> right. clearly, it helps with the payout ratio although they would say that really is not the focus of the deal. strategically, they can do math. $9 billion a year in dividend payments will be helpful, the cash flow they will gain from direct. strategically, a lot of people question whether it makes not perfect sense, but whether it made sense. you think it does? >> i think it's additive. is it game changing additive, no. some of the logic they had about offloading traffic and how they can combine and market together,

i think those are positives but i don't think it's a game changer for them. >> why not? >> well, i think you're right, it doesn't fundamentally alter the landscape in some huge way. i think it's an additive thing. >> on the content side, if i'm a programmer now and i'm looking at comcast which will have 30 million homes, and this new at & t direct which will also have 30 million, should i be worried about their market power? is this going to change the balance of power so to speak between distributors and content producers? >> i think that you have already seen some consolidation among content companies and i think a lot of that's going to continue. i don't think this fundamentally changes the landscape. if you are a strong content company, you are probably still a strong content company. if you are challenged by the large distributors because of their market power, you are still challenged. i don't think you are significantly more challenged. there is a trend towards consolidation among the content

companies. you have seen some of it. i think you will see more. this probably isn't -- >> you don't think we will see a huge wave of consolidation amongst content companies? some of the big deals, perhaps, that people have talked about for years finally happening? >> i think that you will see the smaller guys trying to get together to aggregate faster than the big deals. >> although you got 30 million homes and you get in a dispute with cbs or whomever it is and you shut them off, that's got to hurt. >> the 30 million home guys, they are power but comcast, when they had 23, is that so different? >> seven million more. that's all. let's talk a bit about liberty itself. you guys had a busy quarter. sirius certainly plays importantly into a lot of the different things you have been doing. they bought back a good amount of stock from liberty, obviously you guys still control it. >> right. >> you had an offer out there comprised of liberty stock to buy in which you didn't own the sirius, then you pulled it. meanwhile, the stock went from

3.70 or above your offer, it's well below that now. why don't you come back and try it again? >> well, i think at the time we said, and i still believe that it makes sense to bring in sirius into the liberty family. we own 52% or 53% today, something like that, and it comprises over 70% of what's in sirius -- excuse me, sirius comprises over 70% of what's in liberty by market value. but we're not going to chase it and there's no reason. it's a positive for us. it's more tax efficient to have access to those cash flows. there are some good reasons why not to have the two stocks. but it's not a deal to be chased. i think the passage of time, we will see what happens. you rightly point out that they're bringing in stock. i think they will probably find a low stock price today an attractive point to buy back a lot of stock, and that will have the impact of increasing our ownership over time without taking any of their actions. >> you will accrete up.

>> they are about 2.8 times leverage. they did about a billion and a half dollar deal a few weeks back, bond deal. they stated their target is four times leverage. that's an awful lot of share purchase. >> what about the business? some people believe and perhaps that's fleereflected in lower s price that it's slowing a bit, that they need to do an acquisition of one of the streaming services, whether it be pandora or another name. >> two points there. the first on slowing growth. they say for a long time that their business would shift to some degree from new car edition to s to a free cash model. some of that is how new subs are counted for. part of that is a focus on the secondary market. they announced that around the beginning of the year and that's caused trepidation. i think the business is very much fundamentally healthy.

the second point you raise is the shadowing or the foreshadowing of what will happen about streaming. i think a lot of the sirius xm customers are streaming customers already, either of sirius xm or pandora or spotify. over time we need to strengthen our streaming offering whether that's through a partnership or acquisition or building our own. we will see. i don't think that threatens the sirius xm business for a long time. you look at the average age of a car buyer, you look at the ease of use, you look at the exclusive content, the advantages we have, i feel very comfortable with the strength of the business. >> so it may be a deal one day but nothing near term needed? >> i think we need a streaming offering that gets strengthened over time. that may be a deal, it may be building our own or it may be a partnership. something. but it's not today's problem. it's a longer term issue. >> we ran out of time. i was going to talk all about the atlanta braves. >> still in first. >> who's the first baseman? >> freddie freeman.

>> he knew. >> trying to test me. >> darned right. tv contracts to come still, too? >> we did that last year. very effectively. >> sports programming is pretty expensive. >> it is. >> yeah. >> high quality product like the braves deserves it. >> all right. directv and the nfl is another one. we can talk for all day but we are out of time. greg, thank you. appreciate it. greg maffei. simon, back to you. >> great interview. thank you very much. david faber in d.c. coming up on the show, an exclusive with the ceo of fiat chrysler. we get his take on gm and the state of the auto industry five years after the bailout. financial noise

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million barrels. the estimates were all over the place but after last night's api report of a draw-down of more than ten million barrels, traders were kind of expecting this. we are seeing prices today support it. they are over $103 a barrel and we are seeing them pretty much trade flat on this news again because of what we saw from the api last night. but what's interesting is the reasoning here. the api reporting that it's an issue of imports because of geopolitical issues, because of what we're seeing in libya and nigeria, iran, we are not importing as much oil and that is why supplies are down. also, refinery run rates are up and of course, when the run rates go up, we use more oil to produce oil and that is why some of these inventory numbers go down. but interesting to see what's happening with the price action here. wti right now, $103.35. back to you. >> thank you very much, jackie. take a look at consumer discretionary today. one of the best performing sectors, as you might imagine, given some of the market action. dom chu has more. >> so a good day for those

consumer discretionary stocks. if you look at what's really leading the way, tiffany's obviously to the upside after the luxury goods maker easily beat first quarter street forecasts. it also raised its full year forecast as well. then there's tgx companies, ross stores, l brands and michael kors rounding out the top five. the second best performing sector in the s&p today helped by some of those names. back to you guys. >> thanks so much. we turn to phil lebeau, who has a very special guest for us this morning. >> i'm joined by sergio marchionne. we are here at the brookings institute. we will be talking about the five-year anniversary of the auto bailout. you will be talking in just a few minutes. looking back five years ago, when you first had an opportunity to buy chrysler, did you think things would work out the way they have over the last five years? >> not at all. i thought we would be all right but not -- i didn't think we would be this far. >> did you think that the

rebound in auto sales wouldn't happen, or did you think the effort to turn around chrysler would not happen as quickly as it did? >> actually both. i was a lot less optimistic about volumes in the u.s. we had a lot of work to do, the ability to execute on the timeline was not really certain. i'm incredibly proud of what they have done. they have done a phenomenal job of turning chrysler around. >> just laid out your five-year plan. a big part of the growth you are expecting over the next five years will come with the jeep brand. is jeep on the cusp of a global explosion? >> it's going to triple volumes, nearly triple volumes between now and 2018. all the plans to get it done are in the process of completion. we have one plant going up in brazil now that's going to produce a couple hundred thousands jeeps, it will be up in the first quarter of '15. we have a plant in china that's going up at the end of this year, a second plant in china going up at the end of next

year. and we are now looking at aggressive ways of developing u.s. facilities to make sure we have growth. we have an italian plant that will be producing jeeps. >> and china is coming. >> and china is coming. so the machine has started. it is the most, potentially, the most global brand that we have. i have huge expectations. it will have positive impacts on the u.s. it was said we will never build a wrangler or grand cherokee outside the u.s. >> i want to ask what's happening with regard to recalls in the united states. you have been very vocal about this. separate from general motors, there is a hyper sensitivity in the auto industry for initiating more recalls. you are concerned about this. you believe that the industry almost is trigger-happy, so to speak, correct? >> i think it's totally understandable that in an environment like this, our technical people, the ones that look to these issues, are going

to become gun-shy and they will by definition go the full distance to make sure there is zero risk in making these recalls. some of these recalls may not be safety recalls. they may be customer appreciation. they may be a variety of things that have nothing to do with safety but it's making the headlines and this morning, you saw the numbers. these numbers are getting incredibly large. so it can't be that all these issues have been festering in the system for so long and they have not been surfaced. so there is a change in attitude. whether all that change is justified or not is unclear to me. i can tell you that our house has become a lot more sensitive to this. i'm not involved in the process. >> but the critics would say what's wrong with recalling more vehicles if it makes sure that there are fewer problems on the road? >> because some of these recalls may not be safety related.

if we are covering every ounce of risk, items not related to the operation of the vehicle, being done for customer satisfaction issues, we are giving the business the wrong reputation. it's as if we cannot make cars anymore. it can't be all of a sudden we woke up and realized we made defective cars. >> are you getting any feedback that that's filtering through to the buyer, that the consumer out there, whether general motors or in general, is saying there are recalls all over the place, i don't know if it's the right time to buy a particular model? >> i think it's too early to tell whether there has been a structural change but there is no doubt that the industry is going to have to adjust to a new paradigm. this is permanent. we will come back to a more balanced view of recalls but i think it will take a few months, if not years, before we get there. >> last question, quick answer. what's your view of the u.s. consumer right now? how strong are they? >> very strong. i'm incredibly bullish on the

u.s. i think we are going to see the next couple years, for sure, in good terms. >> sergio marchionne, chairman and ceo of fiat chrysler joining us today. guys, back to you. >> incredibly bullish on the u.s. phil lebeau, thanks for bringing us that interview. markets hanging on to triple digits, as you can see, with the dow up 132 points. consumer staples lagging behind. more on today's big moves after the break. if i told you that a free ten-second test

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welcome back to "squawk on the street." the sun is shining bright, shares soaring this morning for a chinese solar company that's reversing a loss from last year. it's being helped by rising prices in solar panels. it forecasts higher shipments for the current quarter. this is a smaller cap stock, still, it's up about 23% toward session highs in today's trade. carl, back to you. >> let's get across the room from where you are. brian sullivan is watching some of this dispute. >> it's kind of an oddly worded letter being put out by the new york attorney general's office. i will do my best to make quick sense of it here. basically, they are coming out saying they work hard with airbnb, the new york a.g., to make a deal. they are calling this an agreement. it has to do with subpoena power. effectively, according to the

compliance document that was sent out, legalese, is that basically airbnb will provide user information to the new york attorney general. that initial user information apparently is going to be anonymous. so the new york a.g., if they think someone is running an illegal hotel, will get information from airbnb, no names. they will do due diligence. if they think the person is indeed running an illegal business under the terms of agreement, then apparently airbnb will be able or will provide them with the user information. so basically, the new york attorney general coming out saying we have reached an agreement, that's their term, to comply with the subpoena power effectively. the two sides have been going over whether or not airbnb is a hotel service, basically as it says it is, and whether airbnb allows people to run illegal lodging operations. it looks like airbnb will be complying with parts of that subpoena here. the fight i think continues. the bottom line in this whole story is very simple.

sara eisen's 4,000 square foot penthouse can still be rented out as long as she complies with the terms of the agreement under subpoena power. >> that's a huge issue, surely. because they may have reached a deal but there must be many people who will be reluctant to use airbnb because they know they can be thrown into the tax system. it may cut at the heart of the business of what they're trying to do. >> i will give my unfetterred nonlegal advice here which is that read the terms of agreement closely. if you are an airbnb user, don't just click agree. probably a good thing to do is read through the terms of use very closely. >> i have actually never airbnb'ed. have you done it? >> is that a verb now? >> maybe. i will make it one. >> no, i have not. i have not couch surfed or airbnb'ed. i'm either in the back of my jeep with a sleeping bag or hopefully in my own bed. >> nice to see you, brian. up next on the program, the ceo of oppenheimer funds weighs in on the markets, where you should be investing now. "squawk on the street" will be right back. e or au lait?

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this week executives from the country's larngest asset management firms are gathering in washington to discuss the opportunities and risks facing the industry and of course, their own investors. tyler matheson joins us live from the investment company institute's annual member meeting. good morning. >> simon, thank you very much. this is the big conclave of the year for the men and women who run some $16 trillion worth of your money, your accounts, and we are joined now by a ceo of oppenheimer funds, bill glavin, $237 billion under management and 11 million accounts of people just like you. good to have you with us. >> thank you, tyler. >> i'm curious. one of the things in the business that stands out to me is how reticent, hesitant, people were to get back into equity funds after the market break of 2008-2009. is that persisting? >> it is still persisting.

it changed a little bit given the performance of the equity markets but only recently. i think you have two phenomenons there. you had people nearing retirement who saw a very significant decline in their equity assets and as a result, sort of went more conservative to protect their retirement nest egg. on the other side of the coin, you saw the younger investors who had been through now what amounted to ten years of no material equity returns at all, and kind of lost faith in the equity markets. so they are just gradually starting to come back in. >> but not piling in. not piling in. is that healthy? in other words, they are not chasing the returns? >> yeah, that's true. but i think longer term, it's a bigger issue, particularly for the younger investors, because they need to have more exposure to equity markets because they have 30, 40, 50, maybe 60 years left ahead of them, and fixed income funds or cash are not going to generate the kind of returns they need to create a nest egg for the future. >> you know, an awful lot of the money did go into bond funds and people have been worried and i heard you just say that you are a little bit concerned about

when the inevitable turn comes, and interest rates rise, a lot of peeb don't understand that that's not good for their bond fund value, number one, and they may be exposed to the kinds of loss of principal or equity value that they had in the stock market which may sour them even more. >> i agree, it's a concern we have both at our firm but also in the industry. a couple things i point out. while there has been a shift into fixed income over the last five or six years, it's perhaps not as dramatic as people think. the number i saw from the ici, about 33% of assets were in fixed income and now it's about 37%. so it didn't go to 80%. i think there's this perception that all the money went over into bond funds. that's not true. there is clearly more allocation to bond funds than there was but it's not a huge reallocation. but having said that, there is a lot of -- bonds are complex and i don't think people understand the relationship between rising interest rates and the value of the bond. so they think of it as rates are going up, that's good for me,

i'm going to get more income, but they don't understand that the value of that bond is going to go down. so the big question is how does tapering play out over the next few years. >> that worry you? are you concerned that the fed needs to thread a needle? >> we are all counting on the fed threading the needle. it's not just for bond investors, frankly. it's for the world economy. if they are clumsy in their unwinding, that will spike rates and that will have very negative impacts -- >> you think they have been clumsy so far? >> i don't. i think they have tried -- one of the things everybody needs to remember that is the fed chairman doesn't control interest rates, okay? the markets control interest rates. so depending on how that communication occurs, and we have seen some early missteps where you will see rates quickly spike, but generally, i think they are on the right track and i think we have a long way to go. the consensus in our investment organization is rates will stay relatively low for quite awhile and there is some debate on even when they go up, how much will they go up. they're not going to go back to the '70s and '80s kind of rates. >> a lot of money has piled into

target day funds, the ones that ostensibly move the portfolio to adjust to what your retirement date is. you think investors are relying too heavilyno, and remember why of the money has gone in there. it stems from the fact that with the protection act, an auto-enrollment function that made it available, so employees could automatically enroll, particularly younger employees unless they opted out. so money flowed in. and then, there were certain vehicles designated if the individual did not make a decision -- >> did not elect. >> and that's why you've seen the growth in the targeted funds. that's the default option. it's the modern balance of a fund, more diversification than just a strict stock and equity portfolio. >> right. >> it's not a bad place, particularly for young investors. >> as a default choice. >> -- that they might not be willing to take on their own. it does generally -- it will fare well across market cycles.

>> bill, thank you for being with us. congratulations, you're stipping down as ceo but staying on as chairman. >> sticking around. >> they'll have you to kick around. >> that's right. >> carl, back to you, and we'll have more later throughout the day from ici. >> all right, tyler, thank you so much. dow is up more than 1% today. s&p is within 1% of the all-time intraday high. "squawk on the street" continues in a moment. with fidelity's guaranteed one-second trade execution, we route your order to up to 75 market centers to look for the best possible price, maybe even better than you expected. it's all part of our goal to execute your trade in one second. i'm derrick chan of fidelity investments. our one-second trade execution is one more innovative reason serious investors are choosing fidelity. call or click to open your fidelity account today.

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built for business. we are waiting for the president o to speak in the briefing room following his meeting with v.a. secretary eric shinseki. john harwood has more on what we can expect as the president, john, breaks his silence of this scandal. >> reporter: carl, the president has been getting hammered over the past few days for not speaking out more assertively on this issue. eric shinseki, his choice to head the v.a., has been hammered for not expressing enough anger about the situation. this is a long-running bureaucratic nightmare at the v.a. that has not been solved in the five and a half years of the obama administration. and so, having dispatched a deputy chief of staff, rob neighb nabors to work with shinseki, on the backlog, resolving some of the allegations of secret waiting lists, people losing their lives because of not being

able to get appointments, he's got to come out and express to the american people pretty clearly that he's trying to move more rapidly to get his administration on top of the situation. >> all right, john harwood, we'll continue to monitor. of course, we'll take the president live for you as soon as he comes to the podium. in the meantime, we're looking at the dow still up triple digits, 143 points. janet yellen has just entered nyu. she'll be the speaker at today's graduation, but perhaps more clues from the fed minutes later at 2:00 p.m. the nasdaq and the s&p 500 are all posting gains. the nasdaq up about .75%. we'll be back with more "squawk on the street."

hi, are we still on for tomorrow? tomorrow. quick look at the weather. nice day, beautiful tomorrow. tomorrow is full of promise. we can come back tomorrrow. and we promise to keep it that way. driven to preserve the environment, csx moves a ton of freight nearly 450 miles on one gallon of fuel. what a day. can't wait til tomorrow. who would have thought masterthree cheese lasagna would go with chocolate cake and ceviche? the same guy who thought that small caps and bond funds would go with a merging markets. it's a masterpiece. thanks. clearly you are type e. you made it phil. welcome home. now what's our strategy with the fondue?

diversifying your portfolio? e*trade gives you the tools and resources to get it right. are you type e*? with the dow up 150, we have breaking news from cnbc's john. >> that's right. ipo is 15 times overprescribed. this is also important and everyone has its eyes on it, because alibaba is expected to list later this summer. the company's -- the companies are very similar, and so the strong demand here bodes well for alibaba. >> forgive me for interrupting,

but the president is speaking. >> -- for veterans and their families. as commander in chief, i have the honor of standing with our men and women in uniform at every step of their service. from the moment they take their oath to when our troops prepare to deploy to afghanistan where they put their lives on the line for our security, to their bedside as our wounded warriors fight to recover from terrible injuries. the most searing moments in my presidency have been going to walter reed or bethesda or bagram and meeting troops who have left a part of themselves on the battlefield. and their spirit and their determination to recover and often to serve again is always an inspiration. so these men and women and their families are the best that our country has to offer.

they've done their duty, and they ask nothing more than that this country does ours, that we uphold our sacred trust to all who have served. so when i hear allegations of misconduct, any misconduct, whether it's allegations of v.a. staff covering up long wait times or cooking the books, i will not stand for it. not as commander in chief but also not as an american. none of us should. so if these allegations prove to be true, it is dishonorable, it is disgraceful, and i will not tolerate it, period. here's what i discussed with secretary shinseki this morning. first, anybody found to have manipulated or falsified records